Sales up, profits down at Kennametal; shares -7.4%

Kennametal (KMT -7.4%) remains sharply lower after FQ2 results revealed higher sales but lower profits compared to the previous year.

Revenues rose 9% to $690M, but just 2% was an organic increase and 7% came from the acquisition of Allegheny Technologies' tungsten materials business.

KMT also issued downside guidance for FY 2014, lowering EPS to $2.60-$2.75 from a prior forecast of $2.90-$3.05 and $2.97 analyst consensus; expects total sales growth of 12%-13% vs. prior 5%-7%, and organic sales growth of 2%-4% vs. prior 4%-6%.

Related to the acquisition, KMT plans restructuring actions and expects to incur $40M-$50M in pretax charges within the next three years.

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